FBP 10-K & 10-Q changes, risk factors and insider trading

Below is a discussion about material risks and uncertainties that andcould financialimpact condition, including by causing actualbusinesses, results toof differ materially from those projected in anyoperations, forward-looking statements. OtherAdditional risks and uncertainties, including thoseuncertainties not currently known to the Corporation or itsdeemed managementimmaterial andmay itsalso managementmaterially deemsadversely immaterial,affect futurethe periods.Corporation. Thus, the following should not be considered a complete discussion of all of the risks and uncertainties the Corporation may face. See the discussion under “Forward-Looking Statements,” in this Form 10-K.

THE BUSINESS ENVIRONMENT AND OUR INDUSTRY level,inflation liabilities, and corresponding effects income, net interest margin, originations, deposit attrition, overall results of operations, and liquidity position.

attract retain clients, acceptance prospective

This, turn, affects originations, assets, and the extent of any re-shifting between non-interest-bearing and interest-bearing liabilities.

Conversely, when rates fall, prepayments of principal interest will increase, the duration of MBS will decrease.

Such acceleration of MBSprepayments lower yields premiums accelerate.

Conversely, acceleration in the prepayments of MBS would increase yields on securities purchased at a discount, as the accretion accelerate.

might callable because decreases in interest rates might prompt the early redemption of such securities.

volatility in, runoffs, constraints, and increased regulatory requirements and costs.

May developmentsresulted heightened volatility consequently negatively impacted confidence soundness institutions.

developments resulted in certain regional banks experiencing higher than normal deposit outflows and an elevated level of competition for deposits in the market. The impact of market volatility from adverse developments in the banking industry such as this one are highly uncertain and difficult to predict. In the aftermath of these bank failures, the banking agencies have increased regulatory requirements and costs that may impact capital ratios or the FDIC deposit insurance premium.

monitor the FDIC’s estimated loss to the DIF, which could affect the amount of its accrued liability.

Difficult market and general economic conditions have affected the financial industry in the past and could adversely affect in the future.

deterioration write-downs including U.S. government-sponsored entities (“GSEs”) as well as major commercial banks and investment banks.

CECL, difficult, subjective, and complex judgments, including forecasts of economic conditions and how these economic predictions might impair the borrowers repay loans, which no longer accurately estimated may, turn, impact the reliability of the models.

GSEs agreements) favorable terms, all, disruptions markets deteriorating expectations.

Unfavorable or uncertain economic and market growth,declines confidence; availability or increases in the cost and capital; increases in inflation or interest rates; high unemployment; natural disasters; epidemics and pandemics; or a combination of these or other factors.

impacted home historically cyclical, enjoying periods of strong growth and profitability followed by periods of shrinking volumes and industry-wide losses. During periods of rising interest rates, the series of interest rate increases occurred, the refinancing of many tends to decrease as the economic incentives for borrowers to refinance their existing mortgage loans are reduced.

face substantial competition competitors, automobile leasing brokerage firms unions, retailers, fintech digital platforms.

compete relative appeal meets clients’ compete also depends on its ability to attract and retain professional and other personnel, and on its reputation.

originate loans primarily on the rates and fees charged and the service it provides to its borrowers in making prompt credit decisions. There can be assurance that future the Corporation will to increase its deposit base, originate loans in the manner or on the terms which it has done so in the past, or otherwise compete effectively.

The Corporation’s credit quality and the value of the portfolio of Puerto Rico government securities hashave been, and in the future be, taken government or the PROMESA oversight board to address the ongoing fiscal and economic challenges in Puerto Rico.

the Corporation had $288.6$297.8 million of direct exposure to the Puerto Rico government, its municipalities and public corporations. As of December 31, 2024,2025, approximately $195.8$211.3 million of the exposure consisted of loans and obligations of municipalities in Puerto Rico that are supported by assigned property tax revenues and for which, in most cases, the good faith, credit and unlimited taxing power of the applicable municipality have been pledged to their repayment, and $51.1$42.2 million consisted of loans and obligations which are supported by one or more specific sources of municipal revenues. The municipalities are required by law to levy bonds notes. In addition to municipalities, the total direct exposure also included $8.8$8.7 a loan extended to an affiliate of PREPA, $30.0 corporations$32.9 MBS issued the PR Authority (“PRHFA”), $2.9$2.7 million as part of its available-for-sale debt securities portfolio (fair value of $1.6 million as of December 31, 20242025).

funded conduit structures support the federal programs of Low-Income Housing Tax Credit (“LIHTC”) combined with Community Development Block Grant- Disaster Recovery (“CDBG-DR”) funding amounted to $59.2$92.4 million. The main objective of these programs is to spur development in new or rehabilitated and affordable rental housing. PRHFA, as program subrecipient and conduct issuer, issues tax-exempt co-underwrite mirror agreement for the specific project loan to which the Corporation will serve as ultimate lenderlender, but where the PRHFA will be the lender record.

The Corporation operates in various jurisdictions highly dependent on federal funding programs. On January 27, 2025, the Office Budget (“OMB”) Memorandum M-25-13 “Temporary Pause Grant, Loan, Financial Assistance Programs.” The Memo directed every federal agency to “temporarily pause all activities related to obligation disbursement assistance, agency implicated orders, including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, green deal.”

Lawsuits challenging pause immediately filed